BancAmerica Equity Partners Eyes German Mid-Market

BancAmerica Equity Partners (BAEP), the private equity arm of Bank of America, in October appointed Jurgen Immer as a principal to head its activities in Germany and the German-speaking markets. He will be based at a new office in Frankfurt, which will complement BAEP’s existing European offices in London and Warsaw.

Jurgen Immer joined BAEP from Coca-Cola in Berlin, where he was involved with the restructuring of the company’s bottling activities; he previously worked for Warburg Dillon Read in Frankfurt and Price Waterhouse Corporate Finance in Berlin.

BAEP established its London office at the end of last year to capitalise on the Western European deal flow the group had begun to receive as its Central European business expanded. Despite BAEP’s London headquarters, the group’s markets of choice in Western Europe are France, Spain and Germany, rather than the UK. The establishment of a direct presence in Germany, a market offering such depth of opportunity for private equity investment, is a key element of BAEP’s European strategy.

Discussing BAEP’s approach to the German market, where the group will principally target mid-market private companies, Jurgen Immer emphasised the importance of establishing credibility and building relationships with Mittelstand companies. He said BAEP is well positioned to differentiate itself from other newcomers to the German market, since it would benefit from the automatic credibility conferred by the Bank of America brand. Also, as an investor deploying its own capital, Jurgen Immer believes that BAEP will be perceived by private company owners as likely to take a longer-term view than limited-life venture funds. “in the end, private equity investment is a personal business”, said Jurgen Immer; “It is important to build trust, overcome barriers of thinking, and demonstrate the value-added that an external financial investor can deliver”.

William Obershain, head of BAEP in Europe, said “The German market offers significant untapped potential for BancAmerica Equity partners. Our preference to fund larger-sized deals for established companies, where we can partner with owners who do not wish to lose control, fits the need of many German companies seeking to raise capital for growth”.

BAEP aims to increase the proportion of international investments in its $3 billion portfolio from the current level of approximately 10%, but the group is keenly aware of the importance of scaling up gradually. In Europe, it aims to complete three to five investments per annum, targeting opportunities in the $50 million to $300 million (ecu 40 million-ecu 250 million) enterprise value band.

Recent investments include a co-investment with DBG-Ost Europa Holdings in Hungarocamion, a Hungarian freight group, and Numericable, Canal +’s French cable TV channel, where BAEP invested as part of a syndicate assembled by media specialists Callahan Associates.

Although BAEP focuses principally on direct investments, the group has also made a small number of investments in funds that offer co-investment opportunities.

These include EAC’s second fund, Compass Partners and Alchemy’s Investment Programme. BAEP has also invested in the most recent Halder Holdings fund, and Jurgen Immer expects to work closely alongside the Dutch group’s German office.